W.T.AS. NOS.4/LB TO 6/LB OF 1996 VS W.T.AS. NOS.4/LB TO 6/LB OF 1996
1997 P T D (Trib.) 2059
[Income-tax Appellate Tribunal Pakistan]
Before Ashfaq Ahmad, Accountant Member and
Abdul Rashid Qureshi, Judicial Member
W.T.A. No.4/LB to 6/LB of 1996, decided on 26/02/1996.
(a) Wealth Tax Act (XV of 1963)---
----Ss.3 & 24---S.R.O. Nos.182 (I)/70, dated 4-8-1970 and S.R.O. No.1194 (1)/70, dated 4-8-1970---Appellant's case was remitted back by Tribunal for disposal in accordance with law ---C.I.T.(A) set aside assessment for re-determination of wealth by Assessing Officer---Held, C.I.T. (A) should have taken pains to consider and decide issues on merit instead of leaving applicant's fate in hands of Assessing Officer, when it had sufficient material before him to decide the matter.
(b) Wealth Tax Act (XV of 1963)---
----S. 7---Valuation of agricultural land---Assessing Officer - multiplied produce index unit by Rs.50 in contravene of C.B.R. S.R.O's.---Held, Assessing Officer should have multiplied P.I.U. by Rs.10 as per C.B.R. Notification.
(c) Wealth Tax Act (XV of 1963)---
----S.5---Claim of exemption---Exemption should be allowed on such assets as claimed in returns.
(d) Wealth Tax Rules, 1963---
----R.8 (3)---Mis-quotation of sections---Assessing Officer valued property by applying R.8 (3) of Wealth Tax Rules---Appellant objected to mis-quotation- -Held, although rule was not applicable in that case, yet misquotation of section did not render order to be invalid.
(e) Wealth Tax Act (XV of 1963)---
----S.4---Valuation of property---In absence of any concrete material with Assessing Officer, rate notified by Government for registration purpose should be relied upon.
(f) Wealth Tax Act (XV of 1963)---
----S.2 (m)---Net wealth---Liability---Allowance---Advance---Appellant claimed liability in shape of advances received against agreement of sale-- Assessing Officer disallowed---Such liabilities were, held, genuine and same should be allowed.
(1983) 48 Tax 6; S.R.O. No.182 (I)/70, dated 4-8-1970 and S.R.O. No.1194(I)/70, dated 4-8-1970 ref.
Rizwan Javaid, I.T.P. for Appellant.
Nemo for Respondent.
Date of hearing: 26th February, 1996.
ORDER
ASHFAQ AHMAD (ACCOUNTANT MEMBER).---The appellant is aggrieved against the order of the CWT(A) for the assessment years 1989-90, 1990-91 and 1991-92.
2. The brief facts of the case are that movable and immovable assets of the assessee were evaluated by the Asst. Commissioner of Income Tax and Wealth Tax Circle-07, Companies Zone II, Lahore vide a joint order dated 25-6-1994 for the assessment years under consideration. The wealth of the appellant was determined at Rs.2,415,950, Rs.4,862,825 and Rs.6,836,713 respectively.
3. Being dissatisfied with the treatment of the Assessing Officer the appellant went into appeal before the CIT(A). The CIT(A) dismissed the appeal through a consolidated order dated 25-2-1995 for want of prosecution by the appellant. Against the treatment of the CIT(A) the appellant filed appeal before the ITAT, Lahore, who vide his order dated 22-8-1995 set- aside the order of the CIT(A) and the case was remitted back for disposal of appeals in accordance with law by writing a speaking order after providing reasonable opportunity of being heard to the appellant.
4. The CIT(A) passed a fresh order on 15-11-95 after providing an opportunity of being heard to the appellant and CIT(A) further set aside the assessments for all the three years under consideration. Against the treatment of this CIT(A) the appellant again filed appeals for the years 1989-90 to 1991-92 before us.
5. The first objection raised by the AR of the appellant is that the CIT(A) vas not justified in further setting aside the case for determination of wealth by the Assessing Officer especially when the CIT(A) had all the facts and material evidence before him and was bound to dispose of the appeals on merit as directed by the ITAT vide order dated 22-8-95. The AR relied upon a reported judgment cited as (1983) 48-Tax-6 in which ITAT on an order set aside by the CIT(A) held that the CIT(A) should have taken pains to consider and decide issues on merit instead of leaving the appellant's fate in the hands of the Assessing Officer. This point was considered and we are of the view that the AR has rightly stated that the CIT(A) had material evidence before him to decide the case on merit.
6. The second objection raised by the AR is that the appellant is the owner of 25 acres of land situated at Lopowali Tehsil Daska which the WTO has taken as 50 acres. The perusal of the record shows that the wealth tax returns filed by the assessee for the impugned years the value of the land at Lopowali has been declared but its area has not been indicated. No effort has been made by the WTO to seek clarification nor any inquiry has been conducted by the Assessing Officer to determine the area of land. However the AR submitted before us a copy of register Dakhal Kharij dated 2-4-1980 wherein the appellant's father gifted total land of 50 acres to his two daughters each receiving 50% share. The AR further produced a copy of register Haqdaran Zameen dated 11-4-1992 having the same contents regarding the land under consideration. Whereas the Assessing Officer assessed the total land of 50 acres in the hands of the appellant. Considering the above facts the contention of the appellant is valid on the basis of the documents produced before us. Hence the area of land is to be taken at 25 acres of the property situated at Lopowali Tehsil Daska.
7. The third objection is that while calculating the value of agricultural land the Assessing Officer multiplied the produced index units by 50 for the assessment years 1989-90 and 1990-91 whereas as per SRO 182(1)/70 dated 4-8-70 he should have multiplied the P.I.U. by Rs.10 on the basis of SRO 1194(1)/70 dated 4-8-70 whereas the I.T.O. proceeded to assess the value of land on the basis of SRO 1194(1)-92 dated 1-11-1992 which was not applicable. Copies of both SROs produced before us for examination and after considering them we are of the view that the AR's contention is partly right. The value of agricultural land should be arrived at by multiplying by Rs.10 instead of Rs 50 in the assessment years 1989-90 and 1990-91. However, for the assessment year 1991-92 SRO 1194(1)/92 dated 1-11-90 is applicable and the value of the property should be determined on this basis.
8. The fourth objection is that the Assessing Officer treated agricultural land as Urban property and he excluded the said property from the agricultural assets with the reasons that the AR was confronted vide order sheet entry dated 22-6-1994 and the AR had stated that the land is situated near Jello Park at Tajpura Housing 'Scheme at Main Canal Road, Lahore. The AR. categorically denied that no such statement was made by the AR before the Assessing Officer and as such the very basis of the ITOs action stands demolished. We have examined the record and found that the AR rightly stated no such statement was recorded on the order sheet entry dated 22-6-1994. A scrutiny of the order sheet entry dated 22-6-1994 reveals that on the contrary the AR had disagreed with the WTO on this issue and had stated that the findings of the WTO would be appealed against. The exact words incorporated in the order sheet entry reads as under.
"subject to appeal, no agreement"
Signed (AR)
Furthermore no inquiry had been conducted to resolve this issue. The AR argued before us that the Assessing Officer had not appreciated that the said land situated at Village Tajpura Lahore and not at Tajpura Housing Scheme. He produced copy of register ' Haqdaran Zameen' in which it is categorically mentioned that the said land is under self cultivation and detail of produce such as Bajra, Maize and Chara etc have been specifically mentioned in it. He also filed an affidavit of the appellant regarding the self cultivation of land. We have heard the AR and examined the documents filed by him and after doing so it is relevant to bring on record that the WTO has framed assessments hurriedly and has not made any effort to bring any concrete material on record. This fact of the matter has also been taken note of by the CWT who while disposing of the appeals and has stated in the body of the order as under:
"After scrutiny of the assessment record and perusal of appellant's within objections to the treatment accorded by the WTO I find that the appellant's assets have not been properly ascertained. No formal notice has been issued to appellant at assessment stage and no inquiries have been conducted. Similarly in the case of non -agricultural property no inquiries appear to have been conducted and estimates of value of house and commercial properties have been made apparently on the whim of the WTO. This is clearly not proper. "
In view of the evidence produced before us and the facts of the case we have no alternative but to accept the appellant's plea and treat the land as agricultural.
9. The fifth objection raised is that the Assessing Officer allowed exemption which has not claimed on house situated at Railway Colony Lahore for the assessment years 1989-90, 1990-91 and 1991-92. The AR argued that the option of exemption is with the appellant and not with the Assessing Officer. We have examined the relevant record and scrutinized the wealth tax returns for the assessment years 1989-90, 1990-91 and 1991-92 and we find that the appellant's objection for the assessment years 1989-90 and 1990-91. is misconceived as the house at Railway Colony has been claimed exempt as per Part IV of the Wealth Tax return. However, for the assessment year 1991-92 as per wealth tax return for the year 1991-92 exemption for the aforementioned house has not been claimed. Therefore, the exemption should be allowed only on such assets/amounts as claimed in the returns for assessment year 1991-92.
10. The, next objection is regarding the value' of house situated at Sialkot. The Assessing Officer evaluated the said property at Rs.2,50 'lac,' Rs.3 lac and Rs.3.50 lac for the years under appeal respectively (Half share of the appellant) 'the AR stated that, the value of the house is excessive, arbitrary and baseless. This contention of the AR has no force because no house of 4 1/2 'Kanal is less than Rs.5 1ac even in Sialkot, hence the action of the Assessing Officer is right and calls for no interference.
11. The severity objection is regarding the value of property situated at Changar Mohallah, Lahore. The Assessing Officer evaluated the said property at Rs.50,000, Rs.50,000 and Rs.550;06b for' assessment years 1989-90, 1990-91_ and 1991-92 respectively. The AR argued before us that the above said treatment of the Assessing Officer is arbitrary excessive and baseless. Re argued before us that the said property is having a total land of 152-sq ft and the appellant is the owner of-half share in the said property which comes to 76 soft of land lie further argued' that the- value of construction comes to Rs.6,579 per soft. which is liable to be reduced.-We feel no need of interference as the property is commercial in nature and we therefore, confirm the treatment meted out by the WTO being reasonable and fair.
12. The next objection was raised by the learned AR regarding the valuation of plot situated at Defence Housing Society Lahore by applying Rule 8(3) of the Wealth Tax Rules, 1963 at Rs. 16 lac, Rs 17 lac arid Rs.17.5 lac for the assessment year 1989-90 to 1991-92 respectively. The learned AR objected that the WTO has evaluated the value of plot under Rule 8(3) which are not applicable in case of plots and, therefore the WTO's orders for the impugned years suffer from illegality and are liable to be annulled. Although we agree that Rule 8(3) was not applicable with regard to the estimation of plots of land but we also find that the AR's arguments are not tenable as the mis-quotation of a section does not render an order to be invalid. The AR argued before us that the Assessing Officer estimated the value of plots at a high figure by simply mentioning in the body of order that;
"Value confronted to AR vide the above order sheet entry under Rule 8(3) in the light of parallel cases"
He submitted that the WTO did not even bother to mention the names of NTNs of the so-called parallel cases. No inquiry was conducted in the assessee's case to determine the value of plot. No notice under section 62 was issued. The learned AR produced before us the rates notified by the Deputy Commissioner, Lahore for the purposes of Registry for the relevant assessment years. The rates notified by, the Government of the Punjab for Registry purposes is Rs.240,000 per Kanal. The appellant has plot of two Kanal 'and she declared the value of land at Rs.41,000. The declared value of the said plot is too low. The value of plot comes to Rs.20,500 per Kanal of land. We are of the view that the value of land as declared by the assessee is ridiculously low. In the absence of any concrete material with the Assessing Officer we are of the view that the rates notified by the Government of Punjab for registration purposes should be relied upon and we therefore, fix the value of plot at Rs. 480,000, Rs 550,000 and Rs.600,000 for the assessment years 1989-90, 1990-91 and 1991-92 respectively. In this context the RCITs have also instructed their officers that while evaluating the property to adopt the rates fixed by the Punjab Government unless they are in possession of concrete and irrefutable evidence. RCIT Circular No.7 of 1987 dated 19-12-1987 can be referred in this behalf.
13. The next objection raised by the AR before us is relevant for the year 199)-92 only. He stated that the cost of construction of property situated at Changar Mohallah Lahore has been declared by the appellant in the moveable assets at Rs.5 lac. The Assessing Officer while passing the assessment order mentioned the cost of construction under the head of property at Changar Mohallah at serial No.6 as well as in the moveable assets at serial. No.8 in which he accepted the declared moveable asset of the appellant. The AR is directed to apply to the Assessing Officer for rectification who shall dispose of the application after proper scrutiny on merit.
14. The final objection raised before us by the appellant is regarding liabilities of the appellant for assessment year 1991-92 only. He stated that the appellant declared a liability of Rs.897,500 (Rs.1795,000/2) which had not been considered by the WTO in his order. The AR stated that the said liabilities mere advances received by the appellant against the agreement of sale, executed between the appellant and the buyers of the land. The AR also produced copy of the sale deed. A scrutiny of the wealth tax return shows that for the years 1991-92 the above amounts had been claimed by the appellant. On, this issue we direct the Assessing Officer to reconsider the matter and if the liabilities are found to be genuine after proper scrutiny the same should be allowed to the appellant.
15. All the three appeals stand disposed of in the manner stated above.
C.M.S./257/Trib. Order accordingly.